Tesla To Start Building Its European Gigafactory Next Year

Tesla will begin the construction of its new Gigafactory in Berlin in the first quarter of 2020, according to a German official.

The American EV maker has signed a declaration of intent with the German state of Brandenburg, where the new Gigafactory will be located, said Joerg Steinbach, the state’s Economics minister, according to AutoNews.

Earlier this week, Elon Musk announced that Tesla will build its European manufacturing plant near the yet-to-open Berlin Brandenburg international airport and will establish a new Research AND Development center within the city’s limits.

Related: Elon Musk Says Brexit Made UK “Too Risky” For Tesla’s European Gigafactory

The new Gigafactory will produce batteries, electric motors and vehicles, starting with the upcoming Model Y SUV and followed by the Model 3 at a later date.

State authorities said that Tesla’s investment in the area will be “in the billions”, with the first phase of production to launch in 2021 and help create between 3,000 to 3,500 new jobs, rising to 7,000 to 8,000 later on.

Steinbach also called Tesla’s schedule for the factory an ambitious one. “They will have to submit documents at record speed,” he said.

Brandenburg, one of the five federal states in the former East Germany, was one of the top contenders for Tesla’s European Gigafactory as it offered at least 100 million euros in aid to the American manufacturer.

Meanwhile, Tesla is about to start sales of Model 3 vehicles built at its all-new Gigafactory in China, which was built in record time. Building a plant in Germany, however, is expected to be more challenging for the company, as the country has some of the highest labor and energy costs worldwide.